Correlation Between Baird Core and Baird Small/mid
Can any of the company-specific risk be diversified away by investing in both Baird Core and Baird Small/mid at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Baird Core and Baird Small/mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baird E Plus and Baird Smallmid Cap, you can compare the effects of market volatilities on Baird Core and Baird Small/mid and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Baird Core with a short position of Baird Small/mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baird Core and Baird Small/mid.
Diversification Opportunities for Baird Core and Baird Small/mid
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Baird and Baird is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Baird E Plus and Baird Smallmid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baird Smallmid Cap and Baird Core is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Baird E Plus are associated (or correlated) with Baird Small/mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baird Smallmid Cap has no effect on the direction of Baird Core i.e., Baird Core and Baird Small/mid go up and down completely randomly.
Pair Corralation between Baird Core and Baird Small/mid
Assuming the 90 days horizon Baird E Plus is expected to under-perform the Baird Small/mid. But the mutual fund apears to be less risky and, when comparing its historical volatility, Baird E Plus is 4.17 times less risky than Baird Small/mid. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Baird Smallmid Cap is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 1,635 in Baird Smallmid Cap on August 28, 2024 and sell it today you would earn a total of 147.00 from holding Baird Smallmid Cap or generate 8.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baird E Plus vs. Baird Smallmid Cap
Performance |
| Timeline |
| Baird E Plus |
| Baird Smallmid Cap |
Baird Core and Baird Small/mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baird Core and Baird Small/mid
The main advantage of trading using opposite Baird Core and Baird Small/mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baird Core position performs unexpectedly, Baird Small/mid can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Baird Small/mid will offset losses from the drop in Baird Small/mid's long position.| Baird Core vs. Metropolitan West Total | Baird Core vs. Western Asset E | Baird Core vs. John Hancock Disciplined | Baird Core vs. American Beacon Bridgeway |
| Baird Small/mid vs. Baird Aggregate Bond | Baird Small/mid vs. Baird Aggregate Bond | Baird Small/mid vs. Baird Short Term Bond | Baird Small/mid vs. Baird Short Term Bond |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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